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I think I'll have to come down on the side of the red site, for one reason, and one reason only: Culture

To expound the point, we need control over all of the peaks adjacent to the city, so that Kaz doesn't get control of them, and hence LoS over the entire area.

Now, the kaz city we would be bordering already has it's second border pop, so it is probably their holy city, with a decent cultural output. The easiest way to overcome this is to settle closer to them and use the advantage of the free 20 culture per turn (per ring pop) into tiles closer to the city.

Now, my suggestion would be to do this: hook up the pigs asap, and grow to size 2, then work and artist (2 when it hits size 3) in the city. By my calculations it would hit the second border pop (100 culture) by around t130, and so would probably be able to contest the southern peak quite well, and give us a massive advantage on watching for incoming boats. We'd also hold the western peak, which would let us have a peak around the Kaz city as well. That would be massive.

The city would actually be just about profitable IMO, making by t120 around 6 commerce just from trade routes and the city tile, plus the, what, 4 beakers from the artist? It'd still have 6 coastal tiles, 1 ocean tile, and be able to work 2 plains hills and a workshopped plains tile (so 13 hpt) at break even. Combined with the advantage the culture would give us, and I think that would just be the best position we could place it.